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InfoQuest

MOC: Use of FTA preferential rights drops due to export decline, Baht appreciation

November 15, 2019


Abstract : Thai official revealed that in the first eight months of this year, a total of 45.17532 billion U.S. dollars of value was acquired from FTA preferential rights, accounting for 78.94 percent of the total export amount of commodities enjoying trade preferential rights, dropping 3.30 percent on year.

InfoQuest (November 14, 2019) -- Mr. Kirati Ratchano, inspector and acting director-general of the Department of Foreign Trade (DFT), revealed that in the first eight months of this year (January-August), a total of 45.17532 billion U.S. dollars of value was acquired from FTA preferential rights, accounting for 78.94 percent of the total export amount (57.23054 billion U.S. dollars) of commodities enjoying trade preferential rights, dropping 3.30 percent year on year. That was consistent with the trend of Thailand's export. Because of the drop of exports to some market, Thai export shrank 2.20 percent year on year. The main reasons were longstanding China-US trade war, the economic slowdown of trading partners, and baht appreciation.

During the eight months, the following five markets benefited most from Thailand's FTA preferential rights, including: (1) ASEAN, 16.57917 billion U.S. dollars; (2) China, 12.57486 billion U.S. dollars; (3) Australia, 5.39106 billion U.S. dollars; (4) Japan, 5.10213 billion U.S. dollars; (5) India, 3.01903 billion U.S. dollars. Peru has witnessed the highest increase rate in terms of the total utilization of preferential rights, which was 22.42 percent, followed by New Zealand, 7.88 percent, and China, 5.78 percent.

The top five FTA frameworks with the highest utilization rate of preferential rights included: (1) Thailand-Chile (97.69 percent); (2) China-ASEAN (97.40 percent); (3) Thailand-Peru (92.37 percent); (4) Thailand-Japan (89.98 percent) and (5) ASEAN-Korea (84.11 percent). The products with the highest utilization value of preferential rights included: truck, fresh durian, synthetic rubber products, fresh or dried guava, mango, mangosteen, and sugar.

Compared with the same period of last year, markets witnessing the decline of the utilization value of preferential rights included: (1) ASEAN market, dropping by 7.14 percent, involving the export of major export products such as uncarbonated drink, guava, mango, mangosteen, and sugar; (2) Australian market, dropping by 13.89 percent, involving major export products including auto and parts, air-conditioner and parts, and processed tuna; (3) Chile market, dropping by 31.05 percent, involving major export products such as truck (diesel or semi-diesel), tuna, and washing machine; (4) Korean market, dropping by 2.75 percent, involving major export products including aluminium scrap, plywood, shaving board and natural rubber.

Despite the overall drop in the total utilized value of FTA preferential rights, there were still markets with export potential and increasing utilized value of preferential rights, such as Peru, New Zealand, China and Japan.

According to Mr. Kirati, in 2020, DFT will continue to push for the plan of promoting the use of trade preferential rights, in a way to enhance the competitiveness of entrepreneurs. DFT plans to host seminars in Bangkok and provinces with the power to issue a certificate of origin, including Nong Khai, Chiang Rai, and Songkhla. The objective is to make enterprises better understand the issuing of certificate of origin and relevant knowledge, such as the rules of origin, the rules of issuing certificate of origin, and the inspection of certificate of origin under FTA, and relevant services offered by DFT in issuing certificate of origin.

Besides, DFT also plans to work with the mobile working group for cooperation organization of the Industrial Estate Authority of Thailand (IEAT) to offer consulting services to targeted operator groups within central and regional industrial parks on preferential rights and relevant rules, aiming to make relevant enterprise operators communicate with experts on trade preferential rights related to rules of product origin.

Source: InfoQuest, by Phana/Tanawat/Rachada, translated by Xinhua Silk Road

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Keyword: Thai-FTA trade-preferential-rights

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